CANDEY wins compensation for opponents' discovery violations in NY federal copyright infringement case

CANDEY wins monetary penalties for opponents’ discovery violations in NY federal copyright infringement case

On 28 September 2022, CANDEY clients Coda Publishing and its senior officers won their motion for discovery sanctions under Federal Rule of Civil Procedure 37 in their ongoing defense against copyright infringement claims brought by seven major international record companies (19-cv-11892 (SDNY)). Per the ruling by District Court Judge Katherine Failla, the plaintiffs must pay Coda for the legal fees it incurred in litigating the sanctions motion as well as for further discovery and supplemental summary judgment briefing.

The underlying dispute involves the commercial distribution of documentary films involving some of the biggest acts in modern music, including the Rolling Stones, Nirvana, and U2. In 2019, plaintiffs sued UK-based Coda Publishing and its officers in the Southern District of New York for numerous alleged instances of copyright infringement and sought up to $20 million in damages. During discovery, defendants sought all documents relating to plaintiffs’ ownership of the copyrights at issue. When plaintiffs filed for summary judgment in 2021, however, they sought to rely on several agreements that were not disclosed during discovery. These agreements dated back to the 1960s and purportedly established transfer of the intellectual property rights for various Rolling Stones songs to plaintiff ABKCO Music & Records, Inc.

After CANDEY partner Josh Ray took over the case from defendants’ former counsel at a large American law firm, defendants filed a Rule 37 sanctions motion for ABKCO’s failure to produce the agreements during discovery. Following oral argument and briefing last Spring, Judge Failla stated that she had “no difficulty” finding that plaintiffs had violated their discovery obligations. Rejecting plaintiffs’ claim that they were unaware that the documents had not been produced, Judge Failla ruled that they “were aware that the documents had not been disclosed at least as of the filing of their motion for summary judgment” and thus “should have, and were required to, disclose the documents as soon as they learned that they had failed to do so earlier.”

Finding that this violation was neither justified nor harmless, Judge Failla ordered discovery re-opened to allow defendants’ to probe the documents at issue in a forthcoming deposition of ABKCO’s president and to supplement its summary judgment brief accordingly. The costs and legal fees associated with this are to be covered in full by plaintiffs, as are the costs incurred by defendants’ for their Rule 37 motion.